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The regulations of transfer pricing in the Czech Republic deal with the determination of prices in transactions (e.g. sale of goods, provision of services or provision of loans) realized between economically or personally related companies. The aim is to ascertain that the arm’s length principle is met.
Income Taxes Act No. 586/1992 Coll. (Section 23 (7))
Section 23 (7) of the Czech Income Taxes Act stipulates that if prices agreed between related persons (parties) differ from prices agreed between unrelated entities in common business relations under the same or similar conditions and the difference is not properly documented, the taxpayer’s tax base shall be adjusted by the ascertained difference.
As a member of the OECD, the Czech Republic applies principles and recommendations issued by this organization. In this regard, the OECD issued the OECD Guidelines in 1995 which were subsequently updated in July 2010. The OECD Guidelines are not legally binding for the Czech Republic, nevertheless, are widely followed.
The Transfer Pricing principles defined by the OECD Guidelines were implemented into the Czech tax system by Guidance D – 34 of the Ministry of Finance. Even though not legally binding, Guidance D – 34 provides guidance for taxpayers how the Czech tax administration will approach the Transfer Pricing issues. Therefore, it is recommendable to follow the principles included in Guidance D – 34.
The Czech Republic is one of the parties to the EU Arbitration Convention. This Convention establishes a procedure to resolve disputes where double taxation occurs between enterprises of different Member States as a result of an upward adjustment of profits of an enterprise of one Member State. The Convention provides for the elimination of double taxation by agreement between the contracting states including, if necessary, by reference to the opinion of an independent advisory body.
The term „related persons” (“related parties”) concerning transfer pricing in the Czech Republic refers to:
Parties that are related through capital, where:
Otherwise, related parties:
The OECD Guidelines set out three traditional transactional Transfer Pricing methods and two profit-based Transfer Pricing methods.
comparable uncontrolled price (“CUP”) method
resale price minus (“R-”) method
cost plus (“C+”) method
profit split (“PS”) method
transactional net margin method (“TNMM”)
Generally, there is no legal obligation to prepare Transfer Pricing documentation. However, under Section 92 (3) of Act No. 280/2009 Coll. (Tax Code) as subsequently amended, the taxpayer is required to provide documentary evidence of all facts, which he is obliged to state in his tax return or other communication with the tax administration. In this context, the taxpayer may be requested to prove, how the Transfer Prices in its related-party transactions are determined, and whether they comply with the arm’s length principle.
The arm’s length principle requires that Transfer Prices charged between related parties are equivalent to those that would have been charged between independent parties under the same circumstances.
The Ministry of Finance therefore issued the Guidance D – 334 that outlines the recommendations for taxpayers regarding the scope of documentation that may be used for the purposes of Transfer Pricing. Guidance D – 334 was prepared in accordance with the principles defined in the OECD Guidelines and the Code of Conduct issued by the EU Joint Transfer Pricing Forum.
Guidance D – 334 provides legally non-binding recommendations that are, however, advised to follow to ensure a smooth tax audit.
It is essential for the taxpayer to have supporting documentation in case the tax authority inspects the transactions, as the burden of proof lies on the taxpayer. During the tax audit, the tax authority may request any documentation that reasonably justifies the substance of the transaction, its benefits for taxpayers, the appropriateness of the fees and the selected method of transfer pricing in the Czech Republic .
The Advance Pricing Agreements (APA) are binding agreements valid for up to 3 years (if conditions and the law remain unchanged) between the tax authority and the taxpayer, which set out the method for determining Transfer Prices in related party transactions.
This concept of “binding ruling” is set out by Section 38nc of the Income Tax Act, which became effective as of 1 January 2006. First, the taxpayer files a request and, consequently, the tax administrator decides, whether the taxpayer has chosen a relevant Transfer Pricing method, which would result in a transfer price determination on an arm’s-length basis. The binding ruling can be issued only for transactions effective in a particular tax period or in the future.
It is impossible to apply for the binding ruling concerning the business relations that have already influenced the tax liability (tax base or tax loss) for the taxable period.
Guidance D – 32 describes the process for issuing binding ruling and the details for the application. Generally, the decision on the method of Transfer Pricing between related parties is effective for three tax periods following the day when the decision was issued.
The fee for APA in the Czech Republic is CZK 10,000 (approx. EUR 400) for one transaction.
Mutual Agreement Procedure is a dispute resolution procedure provided by Article 25 of the OECD Model Tax Convention. The subject of this procedure is the negotiation between two governments with the aim to resolve matters of taxation not in accordance with the particular tax treaty and to try to avoid double taxation.
There are no specific penalties for transfer pricing in the Czech Republic. Generally, when the tax authority successfully challenges Transfer Pricing, a penalty of 20% of the unpaid tax or 1% of the tax loss reduction will be applied. In addition to this, interest for late payment is assessed at 8% + REPO rate of the unpaid tax.
Taxpayers are obliged to fill in the mandatory annex to the corporate income tax return related to transfer pricing in the Czech Republic. This annex describes the intragroup transactions. Qualifying companies must state the information regarding related parties (name, registered office) and state the relevant financial amount.
While in the realm of transfer pricing in Poland, the year 2025 will not bring groundbreaking changes, taxpayers will still be required to adhere to the existing regulations concerning the documentation and reporting of transactions. Increased scrutiny and growing interest from tax authorities in this area demand particular attention and precision in documentation from entrepreneurs. Business owners must be prepared to meticulously document transactions with related entities to avoid potential issues during tax inspections.
This is particularly crucial in the context of international business operations, where transfer prices may be a subject of heightened interest for tax authorities.
Below we present the key information in the area of transfer pricing in Poland.
Entities shall be deemed to be related entities where, directly or indirectly, significant influence is exerted.
Significant influence according to the CIT Act means:
Direct or indirect holding of at least 25%:
The natural person’s actual ability to influence key economic decisions of the legal person or a flawed legal person
Marriage or kinship or affinity to the second degree
Entities deemed as related are required to prepare transfer pricing documentation if the volume of individual transaction exceeds the value:
Regardless of the prerequisites for the existence of relationships between entities, transfer pricing regulations may be applied to transactions, agreements or undertakings with entities from tax havens:
The general concept of the transfer pricing documentation has been maintained. The three levels of reporting consist of:
Local file + benchmarking study
Master file
Country by Country reporting
Represents local documentation containing details of transactions or other events between the Polish company and other group companies disclosed in the accounting books.
The taxpayer is obliged to prepare transfer pricing documentation in the case of perform a controlled transaction with a related entity, if its value exceeds the threshold indicated in the Act.*
The local file shall include in particular:
*PLN 2/10 millions
Benchmarking study is an analysis of the settlements between unrelated entities in transactions all over the market deemed as comparable to conditions established in controlled transactions. Benchmarking study is usually prepared based on specialized databases and market reports.
Comparability analysis’ goal is to prove that the terms and conditions under which the controlled transaction was executed comply with those which would have been determined by unrelated parties (transaction complies with arm’s length principle).
Entities obliged to prepare a TP documentation (local file + benchmarking study) are required to submit the statement that:
Under the changes effective January 1st, 2022, the statement is included in the TPR return.
The taxpayers who execute both transactions subject to the documentation obligation and transactions exempted under Art. 11n (1) of Polish CIT Law are obliged to submit TP-R report.
Master file should be prepared by taxpayers:
The master file shall include the following:
The TPR return requires the taxpayers to provide a detailed overview of transfer pricing surrounding, including the financial indicators, ratios and information of a given entity based on financial statements.
TPR is an obligatory part for entities which conclude controlled related party transactions fulfilling the criteria for transfer pricing documentation (simply, as a rule: if you are obliged to prepare Local File – then you have to submit TPR), as well as (in a limited scope) entities qualifying for the so-called domestic exemption under which they are not obliged to prepare transfer pricing documentation.
The report on the global allocation of income and tax within the group (required for groups where the parent company consolidating the accounts is located in Poland) must be filed by the holding company if the consolidated revenues of the group exceed EUR 750 million.
The CBC-P notification is required to be submitted by each entity in the group to which the CbCR obligations apply. The CBC-P notification can only be submitted electronically, with the deadline set for 3 months following the end of the tax year.
According to the current regulations, the following categories of transactions are not subject to Transfer Pricing documentation:
Concluded by related parties having their registered office, place of residence, seat or management on the territory of the Republic of Poland, as long as they:
Concluded between foreign fixed establishments of related entities located in the territory of the Republic of Poland, having their place of residence, registered office or management board in the territory of a Member State of the European Union or another state belonging to the European Economic Area other than the Republic of Poland
Concluded by a foreign fixed establishment, located in the territory of the Republic of Poland, of an entity having its place of residence, seat or management board in the territory of a European Union member state or another state belonging to the European Economic Area, other than the Republic of Poland, with an affiliated entity having its place of residence, seat or management board in the territory of the Republic of Poland
For which APA has been concluded
Whose value does not constitute revenue or tax-deductible cost on a permanent basis (exceptions – financial transactions, capital transactions, investment, fixed assets or intangible assets transactions)
If the relationship results only from a connection with the State Treasury or local government units
In which the price was determined by means of an open tender on the basis of the Public Procurement Law
Consisting of the attribution of income to a foreign permanent establishment situated in the territory of the Republic of Poland by non-residents, if the regulations of relevant international agreements to which the Republic of Poland is a party provide that such income may be taxed only in a State other than the Republic of Poland
Between companies forming a tax group
Consisting only in making a settlement between related parties of expenses incurred for the benefit of an unrelated party, as long as they,
Constituting low added-value services – if the conditions set forth in art. 11f of Polish CIT Law are met or
Concerning a loan, credit or bond issue – if the conditions specified in art.11g of Polish CIT Law are met.
Generally, the transfer pricing methods accepted by the tax authorities are based on the OECD Guidelines. These methods are:
CUP (Comparable Uncontrolled Price Method)
Resale Price Method
Cost Plus
TNMM (Transactional Net Margin Method)
Profit Split Method
When selecting a price calculation method, taxpayer should make sure it is appropriate for the transaction. Since 2019, there is no obligation to use traditional methods before profit-sharing methods.
The new regulations also allow for the use of another method, including a valuation technique, if none of the five above methods can be used.
Since 1st January 2019, the so-called Safe Harbour provisions have been introduced into Polish transfer pricing regulations. Safe Harbour ensures that certain transactions executed by taxpayers will not be subject to adjustment, provided they meet the conditions specified by the legislator.
These transactions are:
Safe harbour for low value-added services could be applied where the cost mark-up for these services has been determined on the basis of the cost plus or TNMM method and is equal to:
Moreover, the service provider must not have its place of residence, registered office, or management in a tax haven. The recipient of the service should also possess a detailed service price calculation, which includes the type and amount of costs incurred, the method of allocation, the justification for the selection of allocation keys for all related parties using the services, and a description of the transaction, including an analysis of functions, risks, and assets.
In contrast, the conditions for applying the Safe Harbour provisions to loans require that the interest rate be determined based on the type of base interest rate and margin specified in the Minister of Finance’s notice. Additionally, the loan agreement must not include any provisions for remuneration other than interest payable to the lender, and the loan must not have a term exceeding five years.
The Ministry of Finance has decided that from January 1, 2025, for the purposes of safe harbour regulations for loan, credit and bond issues, the margin will be changed so that the maximum margin for borrowers will be 2,60 percentage points, while leaving the minimum margin for lenders at the current level of 2.00 percentage points.
It is important to note that, to benefit from the protection offered by the Safe Harbour provisions for loan transactions, the total level of liabilities or receivables of the company with related parties must not exceed PLN 20,000,000 or its equivalent in another currency. Additionally, the lender must not have its residence, registered office, or management located in a tax haven.
The regulations in force since 1st January 2022 have significantly modified the deadlines for the obligation to submit the TPR and to prepare the documentation itself. These obligations must be fulfilled until:
A separate TP statement will no longer be required.
In case of benchmarking study, the analysis should be updated at least once every 3 years (if the business circumstances change in a way affecting the analysis the benchmarking analysis should be reviewed earlier).
Moreover, according to the present regulations, the tax authorities may request the taxpayer to prepare documentation in respect of transactions / events even if the value does not exceed the limits, provided that the circumstances suggest that their value could have been underreported in order to avoid the documentation obligation. In that case, Transfer Pricing documentation should be submitted within 30 days of the request. This obligation does not apply to micro-entrepreneurs.
For the “standard” TP obligations (after exceeding the thresholds) taxpayers are obliged to present complete TP documentation within 14 days of the tax authorities’ request (previously : within 7 days).
The Country by Country reporting obligation applies to:
Polish entities, which simultaneously:
Entities not being the ultimate parent if there is no other entity designated to provide such information in the group if one of the following criteria are met:
According to the present tax regulations members of groups of entities will be obliged to:
The notification should be filed up to 3 months following the end of the reporting financial year of a group of entities. The new regulation* indicates what information should be included in the information about a group of entities.
The tax regulations provide fines for failure to fulfil these obligations (maximum amount: PLN 1 mln).
*The Regulation of the Minister of Finance of 13 June 2017 on the detailed scope of data to be included in the information about a group of entities.
Currently, the Advanced Pricing Agreement (APA) is issued at the discretion of the Head of the National Fiscal Administration (KAS). It serves as a confirmation of the selection and application of a method for determining transaction prices between related parties.
The primary advantage of obtaining such a decision is the elimination of the risk of transfer pricing methodology being challenged, provided the taxpayer adheres to the APA provisions. It also offers protection from penal and fiscal sanctions for individuals responsible for tax settlements.
An additional benefit of an APA was the ability to recognize certain costs, such as low-value-adding services, as deductible under the limitations of Article 15e of the Polish CIT Law. However, since 2022, Article 15e has been repealed, significantly reducing the advantages associated with APAs.
Some further rules regarding APA are as follows:
The fee is 1% of the value of the transaction covered by the APA limited by the following:
Renewal fees are half of the amount of the fee for the renewed APA.
*1 EUR = 4.2730 PLN (ex. rate 31/12/2024)
Since 1 January 2019, new mechanisms have been introduced into Polish tax legislation, enabling tax authorities to estimate revenue more effectively. These mechanisms include:
The tax authorities may apply recharacterization or disregarding of a transaction if, in comparable circumstances, unrelated parties acting with economic rationality would not have entered into the controlled transaction in question.
When assessing such cases, the tax authorities consider the conditions agreed upon between related parties and whether those conditions prevent the transfer price from being set at a level that would have been agreed upon by economically unrelated parties, based on realistically available options.
The potential effects of these mechanisms are as follows:
However, tax authorities are prohibited from using these tools solely due to:
The absence of comparable transactions between unrelated parties in similar circumstances.
To meet the taxpayers’ expectations, the legislator pointed out that a taxpayer can recognize a transfer pricing adjustment by changing the amount of revenues or expenses if the following cumulative conditions are met:
The cooperation agreements have been introduced to the Polish tax system due to the Act on Resolving Double Taxation Disputes and Concluding of Advance Pricing Agreements of 14th November 2019.
The cooperation agreement is intended to ensure that a taxpayer complies with tax law while maintaining transparency in their activities and mutual trust and understanding between the tax authorities and the taxpayer, taking into account the nature of the taxpayer’s business.
The agreement may be concluded by taxpayers with revenues of at least 50 million EUR. The main benefits of the agreement are:
The taxpayer, being a party to the cooperation agreement, has the opportunity to discuss (with the Head of the National Revenue Administration) important issues related to the tax settlements, such as:
At present, the sanctions for the use of non-market prices for transfer pricing in Poland are as follows:
Furthermore, the Fiscal Penal Code provides a fine up to 720 daily rates per day in the following situations:
On the other hand, 240 daily rates per day are provided in the following situations:
As with previous years, our tax experts have prepared a comprehensive tax guideline for Hungary. Our material shall provide you with the necessary information about Hungarian business environment and its statutory framework.
The Act V of 2013 on the Civil Code sets the types of business associations that can be established for business purposes. In the next table we have compiled the most commonly used types of business associations in Hungary with their basic information.
| The form of business | Required subscribed capital | Information | Required number of founders | |
| English | Hungarian | |||
| Limited partnership | Betéti társaság (Bt.) | None | At least 1 member bears unlimited liability. Useful when funds are not available for forming a LLC (Kft.) | 2 |
| Limited liability company | Korlátolt felelősségű társaság (Kft.) | HUF 3,000,000 (ca. EUR 7,600)* | Limited liability for members – liable only up to their contribution as declared by the law. | 1 |
| Private company limited by share | Zártkörűen működő részvénytársaság (Zrt.) | HUF 5,000,000 (ca. EUR 12,900)* | Shares not listed on stock exchange. Recommended for owners who want to distribute rights and shares by their own preferences. | 1 |
| Public company limited by share | Nyilvánosan működő részvénytársaság (Nyrt.) | HUF 20,000,000 (ca. EUR 51,600)* | Can only be formed from an existing Zrt. Shares need to be subscribed publicly. Advised to use when company needs public funding for its activities. | 2 |
* Applied exchange rate: 392 HUF/EUR
All of these business associations are legal persons. The amount of liability varies, as well as the required subscribed capital and the number of founders.
Companies limited by shares (Rt.) are business associations operating either as private company limited by shares (Zrt.) or public company limited by shares (Nyrt.) depending on their shares’ availability on the stock exchange.
General partnership (Kkt.) is not mentioned in the table as it is uncommon to use. Its advantage is that no minimum initial capital is required to start this type of business, but this is certainly one of the riskiest forms. Members of a Kkt. assume unlimited and full liability for the company’s obligations.
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In Hungary flat rate personal income tax applies: 15%. The following contributions are generally payable:
| Payable by employee | |
| Social security contribution | 18.5% |
| Payable by employer | |
| Social contribution | 13% |
The total tax burden (tax + contribution) in case of normal salary is 33.5%, so the general level of net salary is 66.5% of gross salary. The net to total company cost ratio is 58.8%.
Passive incomes (such as dividends or capital gains) and the benefits in kind for employees become subject to 13% contribution, too. However, in case of capital incomes (except for interest incomes), there is an upper limit of tax liability, hence, social contribution tax is only payable until the natural person’s income (both from non-independent and independent work and capital gains) reaches twenty-four times the mandatory minimum wage (which is HUF 290.800 per month in 2025).
Tax rate is 9% of the positive amount of the tax base.
The tax base both for domestic and foreign businesses is the pre-tax profit modified by items declared in Act LXXXI of 1996 on corporate income tax such as loss carried forward, provisions, depreciation, declared share, declared intangible good, dividends, received royalties, research and development, costs incurred that are not in relation with the business’ interests, imposed penalties, thin capitalization, CFC.
Business associations need to submit their CIT returns by May 31st following the tax year. For taxpayers with a different tax year, the filing deadline is the last day of the fifth month following their business year.
Taxpayers with Hungarian residence have to pay corporate tax on their worldwide income (unlimited tax liability), while non-resident businesses only need to pay tax on the income from their Hungarian activities (limited tax liability).
Hungary grants tax credits related to funding film making, certain spectacle team sports, for business growth, for energy efficient investments, for R+D projects, and for small and medium businesses.
Should a company make no profit, it still may have to pay corporate income tax on the income minimum as tax base. If the pre-tax profit or the tax base – whichever is higher – fails to reach the profit minimum, the taxpayer either has to make a statement of its cost structure in its tax return or apply the income minimum as tax base (generally 2% of the total revenue).
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The Hungarian transfer pricing rules are in line with OECD Transfer Pricing Guidelines. Accordingly, price setting of intra-group transactions has to follow the arm’s length principle.
In Hungary, there are no provisions on which particular transfer pricing method is preferred. However, certain methods are listed in the CIT act and the law declares that other methods may only be used after the listed ones have been eliminated.
Hungary introduced the CbC reporting obligation in autumn 2017. First financial year affected is 2016.
In Hungary the related party transactions are to be documented properly; otherwise, the tax authority imposes harsh penalties for each missing or incomplete documentations ranging up to HUF 5 million for the first time, and even up to HUF 10 million for repeated defaults regarding the same transfer pricing documentation.
Hungary implemented the Master file – Local file concept in the lay out and content requirement of TP documentation. FY 2017 can be documented according to the former rules either, but from FY 2018 the new concept is obligatory.
As of 1 January 2023, Hungary introduced data provision obligation for related party transactions, to be disclosed in the CIT return of each taxpayer who is subject to the transfer pricing documentation obligation. FY2022 was already affected by this rule.
The Global Minimum Tax (GLOBE) initiative aims to ensure that multinational enterprises (MNEs) pay a minimum level of tax regardless of where they operate. In Hungary, this means that enterprises must comply with new regulations that prevent them from exploiting lower tax jurisdictions to minimize their tax liabilities. This initiative is part of a broader international effort to combat tax avoidance and ensure fair taxation of global revenues.
For enterprises, this entails a more rigorous compliance and reporting obligation to demonstrate that they are meeting the prescribed minimum tax levels. Failure to comply can result in significant penalties, thereby increasing the importance of thorough and accurate financial documentation and reporting practices.
Tax liability affects the total revenues of resident taxpayers, the revenues obtained in Hungary by foreign individuals or other incomes that are taxable by law, in Hungary.
Taxpayers could be both residents (Hungarian citizens with exception of dual citizens without Hungarian residence, EEC member state citizens with more than 183 days of staying, third country citizens with residence permit and persons only with Hungarian residence) and non-residents (if they earn income from Hungary or according to an international convention, they earn income that is taxable in Hungary).
Hungary has a personal income tax rate of 15% of the tax base. For resident taxpayers, the tax base is their whole income, while in the case of non-resident taxpayers it represents their locally taxable incomes.
Writers, journalists, artists, directors, actors, musicians, circus artists, professional athletes or trainers – under certain conditions – may choose this favourable tax form.
This tax exempts from the personal income tax, social security contribution and social contribution tax excluding taxes and contributions on the minimum wage. Its tax base is the individual’s revenue reduced (if the private person is liable to pay it) with the value added tax.
The applicable tax rate in this case is 15% for private individual and 9.5% for pensioner.
For private individuals covered by social security in an EU member state, the EKHO rate is 9.5%. The payer is no longer obliged to pay EKHO.
The VAT general tax rate in Hungary is 27%. Nonetheless, there are three reduced VAT rates in use: 0%, 5% and 18%.
VAT returns are required to be submitted monthly, quarterly or yearly. Deadline for filing the return is the 20th day of the month following the given period.
The yearly VAT return has to be submitted by February 25th following the given tax year.
Intrastat: in case a taxable person has EU transactions, Intrastat statistical reports must be submitted as well. The threshold for arrivals is HUF 400 million, while the threshold for dispatches is HUF 160 million in 2025.
With the beginning of 2024, the eVAT system has been introduced, which means that the tax authority offers draft VAT returns and administrative benefits for the taxpayers on an optional basis from this year forward.
The OSS system and its application has been extended since 2021 with distance selling and all the services provided for non-taxpayers where the place of performance is in the Member State where the consumption took place. Taxpayers involved in distance selling may register in the one-stop shop system and settle their tax liabilities in respect of several Member States simultaneously. Tax returns must be filed electronically in the EU and non-EU one-stop shop system on quarterly basis.
For B2C distance sales of goods from outside the EU, the Import One-Stop-Shop (IOSS) scheme is applicable.
In line with EU provisions, the threshold for distance sales to non-taxable persons is EUR 10,000.
Certain products and services are the beneficiaries of lower VAT rates.
The 0% rate applies to daily papers (issued at least 4 times a week).
The 5% rate applies to some type of milk, poultry meat, fish fillets and other fish meat, fresh eggs, medicine, books, magazines, specific large live animals, district heating services, instrumental live music performed by artists at private events, commercial accommodation services, restaurants and internet.
The 18% rate can be applied to dairy products, products made from milk, corn, starch and open-air events’ service providers.
Please note that VAT of certain group of services and products are not deductible, such as different types of fuels and motorcycles, passenger cars, taxis, parking services, food and beverages, catering services and residential properties and related activities to renovation of these buildings.
When both the buyer and the seller are taxable persons and not exempt from VAT, domestic reverse charge mechanism is to be applied with regard to certain services and product supply. Instead of including VAT in the invoice, the seller should state in the invoice, that the transaction is subject to the reverse charge mechanism; hence the buyer will have to pay VAT to the competent tax authority.
Domestic reverse charge VAT can be applied to services that require a building permit, construction work in connection with expanding, restructuring, demolition of buildings, maintenance, sale of certain metal products, grain, collateral assets, sale of real estate, trading greenhouse gas emission rights – when the vendor opts for taxability, and labour hire relating to specified construction and other installation works.
The legislation requires an immediate and automated data upload to the Hungarian Tax Authority’s online invoice system, integrated to the invoicing software of taxpayers. As of 1 April 2021, the scope of live invoice data reporting was extended to almost all outgoing invoices issued under HU VAT ID. Not meeting with this obligation may pose significant default penalties.
Purchasing real estate through an asset or share deal is subject to transfer tax obligations. The assessed tax base will be the gross market value of the real estate by the tax authorities’ practice.
The transfer tax rate is 4% up to HUF 1 billion and 2% for the rest of the amount. The total amount of transfer tax payable per property is limited to HUF 200 million.
Tax base for permanent activities performed in the jurisdiction of the local government is the net sales revenue reduced by costs of sold goods, value of mediated services (or above a certain amount of sales revenue by the proportional share of the above mentioned), subcontractor fees, material costs and direct value of research and experimental development. The tax rate is determined by the local government but cannot be higher than 2%.
The tax on temporary business activities is abolished. In the case of construction activity exceeding 180 days the tax on permanent business activity shall continue to be paid.
Regardless of what they are intended or utilized for, both residential and non-residential buildings and structures may set building tax obligations for the taxpayer depending on the decision of the local government.
The owner on January 1st is subject to tax.
Should there be more owners, they need to pay tax according to their proportions of shares in the building.
Depending on the local government’s decision, building tax is either calculated by the useful space in m2 (maximum tax rate is HUF 2,950.1/m2/annum in 2025) or adjusted market value (maximum 3.6% of the adjusted market value of the building).
The owner on January 1st may be subject to land tax. Depending on the local government’s decision, land tax is either calculated by the land’s area in m2 (maximum tax rate is HUF 536.4/m2/annum in 2025) decreased by the structure’s space on the land itself, or the adjusted market value of the land (capped at 3%).
The right of taxation of local governments includes the right to define the tax rates in observation of the upper limits prescribed by the Act but increased according to changes in the KSH consumer price index published. The upper limit plus the increment is to be called the “tax ceiling”.
Both building and land taxes’ rates are heavily affected by the local government’s decisions, so it is advised to obtain the necessary information regarding which method is being used.
The National Tax and Customs Administration of Hungary is the competent authority for customs duties. Since Hungary is a member state of the European Union, no customs procedures are required as free movement of goods is ensured between member states, unless you exceed the non-commercial quantity declared in the Hungarian Excise Act.
Goods purchased for non-commercial purposes are exempt from customs procedures as well. However, transport of specific goods or items such as alcohol, tobacco, weapons, medicines and pets are subject to restrictions depending on the country of origin and means of transport.
Passengers carrying goods from third countries that are outside the EU face more solid restrictions on these products if they depart from another member state.
In addition to the above goods, passengers are exempt from customs duty and taxes for goods imported
up to the value of EUR 300
and up to the value of EUR 430 if travelling by air
The import VAT exemption for imported goods below EUR 22 has been abolished, customs declaration is required for these goods as well. This means that import VAT is payable on imports of consignments regardless of their value. However, in case of import of goods of a value of under EUR 150 the customs exemption remained unchanged i.e. if the value of the goods will be below EUR 150, the consignment will be exempted from customs duty but VAT must be paid on the full value of the consignment.
Both refundable and non-refundable incentives are available to investors coming to or expanding in Hungary. The main types of incentives related to investments are:
The regulations on incentive opportunities are in accordance with EU rules. As tax incentives are the most popular and commonly used form of incentive, we will expand on them further.
In Hungary there are two groups of corporate income tax allowances related to investments:
one of them is decreasing the tax base,
the other has decreasing impact on the calculated tax liability.
This type of allowance is applicable by entities considered as small or medium enterprise at the end of the financial year and has only private person member(s). According to the allowance the enterprise is entitled to decrease its profit before taxation with the amount of investment related to new assets not capitalized during the financial year. The amount of allowance cannot exceed the amount of profit before taxation.
Entities have the possibilities to create development reserve while decreasing the retained earnings for future asset investments. The amount shown as development reserve at the end of the financial year is tax base decreasing item according to the Act on CIT.
As of 1 January 2021, the HUF 10 billion cap on the companies’ development reserve will be abolished, thus higher corporate tax base reduction is available from 2021. However, the maximum amount of the tax base deduction is still limited by the profit before tax for the tax year.
In case of cultural heritage related investment projects on monuments, buildings recorded as historic value, property qualifying under special protection, the double of cost of renovation (investment) of the property can be taken into account as tax base decreasing item. There is the possibility that the cost will be utilized at the related company of the investor. The amount of the allowance on the level of calculated tax cannot exceed the HUF equivalent of EUR 100 million.
Small and medium enterprises are entitled to tax allowance based on interest on loan requested from financial institute for fixed asset investment. The tax allowance available in given year equals with the interest amount paid during the financial year.
The taxpayer is entitled to tax allowance based on investment for energy efficiency. The available tax incentive is up to 45% of the counted costs related to the investment, but at most HUF equivalent to EUR 30 million. The tax allowance can be used in the tax year following the year when the investment was placed into operation – or in the same tax year at the taxpayer’s discretion – and in the following five tax years.
The taxpayer is entitled to development tax credit if:
The rules of such tax credit are determined also by the given government decree beside the Act on CIT. There are different criteria for each tax credit. The main criteria for utilization of the tax credit are that related request has to be submitted to the Minister responsible for Tax Policy.
The tax credit can be utilized in 13 financial years (firstly in the financial year following the capitalization of the investment or based on decision right in the financial year of capitalization) but not later than the 16th financial year following submission of the request.
The taxpayer has reporting obligation related to the investment details in the financial years when the tax credit will be taken into account. The report is part of the annual corporate income tax return.
Taxpayers may be entitled for R&D incentives of which there are two available in the Hungarian tax system. Companies can either decrease their tax base with the costs incurring in relation with R&D, or choose to opt in for a tax allowance after their R&D costs and expenses.
The regulation on corporate income tax laid down strict rules guiding taxpayers on which expenses are eligible for the incentive or the tax allowance. The new tax allowance is also suitable for Companies operating with lower profit as it provides opportunity to have taxes refunded in the amount of the tax allowance calculated. Each R&D project is different, hence all the circumstances must be examined to choose the best solution among the available incentives
Beyond our free tax guideline for Hungary, we’re ready to support you with hands-on expertise tailored to your business needs. Accace offers comprehensive tax advisory and tax compliance services in Hungary to help you navigate local regulations, optimize your tax strategy, and stay fully compliant. Whether you’re entering the market or already operating in Hungary, our local experts are here to make sure your tax matters are in good hands. Get in touch with us today!
Affecting both domestic and foreign businesses, a number of actions triggers the obligation to register for value-added tax in Hungary. To provide a basic overview, our Hungarian experts prepared a comprehensive eBook on value-added tax. Find out more about VAT rates, registration of taxable persons, communication with local tax authorities, compliance and VAT return filing, VAT refund to EU member states or third countries and penalties.
The basic VAT rate in Hungary is 27% in accordance with the EU VAT directive. 0% rate applies to daily papers (issued at least 4 times a week). A reduced rate of 5% applies to some type of milk, poultry meat, fresh eggs, medicine, books, magazines, specific large live animals, district heating services, instrumental live music performed by artists at private events, restaurants, commercial accommodation services and internet. The 18% rate can be applied to dairy products, products made from milk, corn, starch and service providers of open-air events.
When both the buyer and the seller are taxable persons and not exempt from VAT, domestic reverse charge mechanism is to be applied with regard to certain services and product supply. Instead of including VAT in the invoice, the seller should state in the invoice, that the transaction is subject to the reverse charge mechanism; hence the buyer will have to pay VAT to the competent tax authority.
Domestic reverse charge VAT can be applied to services that require a building permit, construction work in connection with expanding, restructuring, demolition of buildings, maintenance, sale of certain metal products, grain, collateral assets, sale of real estate, trading greenhouse gas emission rights – when the vendor opts for taxability, and labour hire relating to specified construction and other installation works.
The supply of goods to other EU member states is free from VAT, if delivered to a VAT payer registered in the member state and the products are transported to any other member state. The export of goods is free from VAT, but subject to a confirmation by the customs authorities.
The taxable amount equals everything that is deemed to be received or shall be received for the delivery of goods or services. In case of the import of goods from third countries, the taxable amount is based on the value of customs.
In Hungary, all domestic taxable persons are VAT payers by law. Before starting any business activity, taxable persons must be registered at least for a VAT number. Retrospective VAT registration is also possible, but it means a delay penalty risk. There is no threshold that makes the obligation applicable or non-applicable.
Group registration for VAT is possible in Hungary.
Several taxable persons who have their seat, place of business or fixed establishment within the territory of Hungary and are considered as affiliated companies, may participate in group VAT registration and therefore be considered as a single taxable person for VAT purposes.
Taxable persons must register to obtain an EU VAT number as well if they will be performing EU transactions, such as service delivery to other EU member states or acquiring goods or services from other EU member states. This registration must be done in advance because retrospective registration is not possible.
Besides that, even natural persons may become VAT payers by law without previous registration, e.g. in case of supplying new means of transport, buildings or unbuilt lands in a series of transactions.
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Foreign taxable person are entities who have no seat, place of business or fixed establishment in Hungary, but who are pursuing business activities with a place of performance is in Hungary.
Foreign taxable persons in Hungary are obliged to register for VAT before doing any activities subject to VAT, and whose place of performance is in Hungary – except, for example, distance sale.
The rules of distance sale have significantly changed from 1st of July 2021. due to the introduction of the One-Stop-Shop (‘OSS’) single VAT return. From July 2021, B2C sellers dispatching their goods from a single country will no longer be required to register for foreign VAT and complete multiple VAT filings in countries where they are selling. Instead, they may opt to simply complete and file a new OSS filing. One of the main changes is the creation of a common threshold of EUR 10,000 up to which B2C EU cross-border supplies remain subject to the VAT rules of the Member State of dispatch, and above which supplies become subject to the VAT rules of the Member State of destination.
In Hungary, local representation by a tax advisor is not obligatory.
However, foreign persons may need local representation in specific situations.
Only Hungarian language may be used for communication with the tax authorities.
A taxable person can communicate with the tax authorities in electronic format, via the company gate or client gate portal of the tax authorities.
A qualified electronic signature is required for the electronic communication.
In Hungary, the calendar month is considered as a tax period at the beginning of the business activity. Later on, and based on financial indicators, it can be changed to a calendar quarter or calendar year.
VAT returns are required to be submitted either monthly, quarterly or yearly. The deadline is the 20th day of the month following the given period. The yearly VAT return must be submitted by 25 February following the given tax year.
The EC sales list shall be filed till the 20th day following the respective period, which is in general the calendar month. The EC sales list may be filed for a period of a calendar quarter in case the taxable person submits the VAT returns at a quarterly basis and the value of delivered goods to other EU member states does not exceed the threshold of EUR 50 000 within the given calendar quarter.
Besides the VAT return, the control statement listing information from received invoices must be filed too, in case the amount of input VAT is deducted.
The legislation requires an immediate and automated data upload to the Hungarian Tax Authority’s online invoice system, integrated to the invoicing software of taxpayers. As of 1 April 2021, the scope of live invoice data reporting was extended to almost all outgoing invoices issued under HU VAT ID. Not meeting with this obligation may pose significant default penalties.
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VAT refund for a foreign taxable person is possible, upon the fulfilment of specific conditions.
In the case of taxable persons established in another Member State of the Community, the right of refund of VAT may be exercised on condition that the VAT refund application is submitted via the tax authority of the Member State concerned. The Hungarian state tax authority shall adopt a decision on the VAT refund application submitted in another Member State of the Community for the given calendar year, if the taxable person established in another Member State of the Community has justifiably submitted the application at the latest on 30 September of the calendar year following the refund period. No application for continuation shall be accepted upon failure to meet the above deadline.
The minimum amount of VAT requested must be at least EUR 50 for the respective calendar year.
The VAT refund may be requested also for a shorter period. However, it shall not be shorter than 3 calendar months and the value of VAT must be at least € 400.
VAT refund to third countries is possible for Liechtenstein, Switzerland, Norway, Serbia, United Kingdom and Turkey, although with restrictions.
The taxable person established in a recognized third State shall submit his VAT refund application directly to the state tax authority in Hungary.
The taxable person established in a recognized third State shall submit his VAT refund application at the latest on 30 September of the calendar year following the refund period, where the application shall be received by the state tax authority by that time. No application for continuation shall be accepted upon failure to meet the above deadline.
The deadline for VAT return is between 4 to 8 months after filing the refund request.
The value of requested VAT must be at least EUR 50 for the respective calendar year.
The VAT refund may be requested also for half calendar year. However, this case the value of the requested VAT has to exceed EUR 400.
Depending on the nature of the breach of the law, penalty for non-compliance can be imposed in form of fine, based on situation and severity, up to HUF 1,000,000 per infringement. Delay interest for late payment is the central bank base rate (that is 6.5% on 31 January 2025) plus 5% points.
Dealing with value-added tax in Hungary can be complex, especially with frequent legislative updates and detailed reporting obligations. Accace offers comprehensive VAT services in Hungary to help you manage VAT registrations, filings, audits, and day-to-day compliance with ease. Our local experts ensure your obligations are met accurately and on time, so you can focus on growing your business with confidence.
Regardless if a Romanian employer contracts a Romanian or foreign individual, they must fulfill certain obligations. According to the labour law in Romanian, in order to hire foreign citizens, employers must take some steps that, for non-EU citizens, are not very simple compared to other countries. Therefore, the difficulty of the employment process depends on the location from which the citizen seeking employment in Romania comes from.
There are more types of employment agreements in Romania, no matter if the individuals are residents or non-residents, of which we mention:
Employment agreement for indefinite period
Employment agreement for definite period
As a rule, the employment contract must be concluded for an unlimited duration. The unlimited duration is a measure of protection for the employee.
By exception, the individual employment contract may also be concluded for a limited duration, under the terms expressly provided by the law. Maximum number of defined employment agreement is 3 successive ones.
According to Article 13 of the Romanian Labour Code, the minimum age required to be employed is 16 years. A 15-year-old individual can be hired for certain activities which will not affect his health or professional development and training and only with the prior consent of the parents or legal representatives.
The employment of an individual under the age of 15 is forbidden.
The future employee must present to the employer documents as:
the study diploma(s)
medical check (cost bear by the new employer)
identity card
birth certificate
the relevant documentation regarding professional specialization (if the job profile implies such special authorization or qualification)
For some positions specified in the National Classification of Positions in Romania are required superior studies and it is not allowed to hire an individual without the necessary qualification.
The non-residents that come from countries out of the UE are usually employed with agreements concluded for indefinite period, because they need to prove stability and the fact that they will be able to support themselves during the term they will live in our country.
To employ this type of non-resident, the Romanian employer needs to go through an entire procedure. Firstly, he/she must obtain the approval of the Romanian Immigration Office, and after this stage, the employee may apply for the staying permit.
For UE citizens it is simpler to conclude an employment agreement in Romania. If the period of their staying in Romania exceeds 180 days in one year, they must register at the Romanian Immigration Office.
After the conclusion of the employment agreement, all employees (residents, non-residents from UE or third countries) have the same rights and obligations in relation with the Romanian employer.
The Labour Code requires that an individual employment contract must be concluded in written form and in Romanian language.
Among the mandatory elements that an individual employment contract must contain with observance of the provisions of Article 17 of the Labour Code, we mention:
the identification details of the employer and employee;
contract duration and the job position occupied in accordance with the Romanian Classification of Jobs, as well as the job description;
salary, periodicity of payment and method of payment;
vacation days and other days off entitlement;
the duration and conditions of the probationary period, if any;
notice period and conditions.
The contract may also specify provisions such as confidentiality, copyrights (in IT area) etc.
The individual employment contract can be concluded with handwritten signature or electronic signature (i.e. advanced electronic signature or the qualified electronic signature). At the conclusion, amendment, suspension or, as the case may be, cessation of the individual labour contract, the parties must use the same type of signature, namely the handwritten signature or the electronic signature, under the terms of the specific law.
For year 2025, the monthly minimum gross base salary guarantee in payment is RON 4.050. The employers cannot pay the employees the minimum gross base salary for more than 24 months.
For employees in the construction sector, the minimum monthly gross base salary is RON 4.582 and for employees in the agricultural sector and food industry, the minimum monthly gross base salary is RON 4.050.
Starting with January 2025, employees in the IT, construction and agri-food sectors will no longer benefit from income tax exemptions or reduced social contributions.
The employee is entitled, according to the provisions of the Labour Code, to a minimum of 20 working vacation days per year.
The probation period depends on the employee’s position and the duration of his/her individual employment contract. For contracts concluded for an indefinite period, the maximum probation period can be of:
Trial/probationary periods for part-time employment contracts shall not exceed:
A Romanian employment contract can cease as follows:
The individual employment contract can be ceased by notice given by each party. The termination notice period depends on the position ‒ management or execution.
The notice period in case of termination upon employee’s request is the following:
Currently, the minimum monthly gross base salary is RON 4.050.
Exceptionally, for employees in the construction sector, the minimum monthly gross base salary is RON 4.582, and in the agricultural and food industry sector, the minimum monthly gross base salary is RON 4.050.
The employer is obliged to compute, withhold and pay monthly the social security contributions and the personal income tax for its employees. The payment of them is processed by the company by 25th of the following month for which the payroll is processed.
The actual percentage of social security contributions and personal income tax are presented in the table below:
| Contributions and income tax | Employee | Employer |
| Income tax | 10% | N/A |
| Health contribution | 10% | N/A |
| Social (Pension) security contribution | 25% | N/A |
| Work insurance contribution | N/A | 2.25% |
The normal length of the work time is 8 hours per day and 40 hours per week, usually Monday to Friday, with two rest days, usually Saturday and Sunday. The rule is that the maximum working time for a week cannot exceed 48 hours per week, including overtime hours.
For overtime work, the employee is entitled to paid off hours within the time limit provided by the Labour Code in Romania (90 calendar days) and, if the compensation with paid time off is not possible, the extra work will be paid to the employee by adding a bonus to the salary which cannot be less than 75% of the basic wage.
Employees are entitled, according to provisions of the Labour Code, to a minimum of 20 vacation days per year (working day, not calendar day).
For medical reasons, the employee is entitled to a medical leave allowance, in percent of 100%, 75% etc.,of the average gross monthly income for the 6 months preceding the period of sickness, depending on the cause of incapacity.
The employer is obliged to pay the remuneration for the first 5 calendar days of incapacity from the medical leave period. The rest of the period is paid by the Romanian state. However, the employer shall credit the state with the amount paid to the employee. In maximum 90 calendar days, the employer is in the position to file a compensation request to the Romanian Health Insurance House for recovering the amounts paid to the employees.
In case of occurrence of special family events, the employees shall be entitled to paid days off which shall not be included in the duration of the rest leave and whose conditions should shall be set forth by the law, applicable collective labour agreement or Internal Regulations of the company.
For solving certain personal circumstances, the employees are entitled to also ask for unpaid leaves in accordance with the provisions of the applicable collective agreement or Internal Regulations of the company.
The most common benefits for employees in Romania are:
meal tickets (meal vouchers)
laptop
private healthcare
travel expenses reimbursed
additional vacation days
gift tickets
mobile phone
gifts for children on several occasions (June 1st, Christmas)
teambuilding programs
Rules for granting meal tickets (meal vouchers):
All the benefits are granted by the employer to the employees through provisions stipulated in the labour contract, the collective contract, Internal Regulation and/or through internal decision, where applicable.
The employment by temporary labour agent is an activity performed by a temporary employee who, at the direction of the temporary labour agent, carries out an activity for the benefit of a user and at the user’s disposal and under its supervision and management.
A temporary employee is a person working for an employer ‒ temporary labour agent- and made available to a user for the duration established by the contract services necessary to perform certain, precise and temporary tasks.
The wage received by the temporary employee for each assignment can not be less than that received by the employee of the user, who performs the same work or one similar to that of the temporary employee.
A temporary labour agent is the legal person authorized by the Ministry of Labour, Family and Social Protection that temporarily provides the user with skilled and/or unskilled personnel employed and paid for this purpose.
The user is the natural or legal person for whom or under whose supervision and management a temporary employee placed at disposal by the temporary labour agent works temporarily.
The temporary work assignment shall be established for a period not exceeding 24 months. The duration of the temporary assignment may be extended for successive periods which, in addition to the initial duration of the assignment, may not result in a period exceeding 36 months.
According to the Romanian Labour Code, the work place can be unilaterally modified by the employer by delegating or posting the employee to another work place than the one provided in the individual employment contract. During the delegation or posting, the employee shall retain his position and every right set in the individual employment contract.
The delegation is the temporary exercise by the employee, on employer’s direction, of works or tasks similar to his usual tasks, outside his workplace. A delegation may be directed for a period of maximum 60 calendar days within 12 months and may be extended for successive periods, with the consent of the employee, for maximum 60 calendar days.
A delegated employee shall be entitled to the payment of the transport and accommodation expenses, as well as a delegation benefit, under the terms of the law or of the applicable collective labour agreement.
Posting is an act by which the employer directs the temporary change of the workplace to another employer, for the performance of certain works in its interest. By way of exception, the type of work may be changed during the posting, but only with the written agreement of the employee.
The posting may be directed for a period of maximum one year. By way of exception, the period of the posting may be extended every six months, with the agreement of both parties, for objective reasons that require the presence of the employee with the employer where the posting was directed. An employee may refuse the posting directed by his employer only by way of exception and for duly justified personal reasons.
The rights due to a posted employee shall be provided by the employer where the posting was directed. During the posting, an employee shall enjoy the rights more favourable to him/her ‒ either the rights with the employer directing the posting, or the rights with the employer he/she is posted to.
The employer providing the posting must take all measures necessary so that the employer where the posting was directed fulfils completely and in good time all obligations towards the posted employee.
The cross-border posting is regulated by several European Directives, including the Directive 96/71/EC, transposed in Romania by Law no. 16/2017. These legal provisions regulate posting on the territory of EU Member States or on the territory of the Swiss Confederation.
An essential element of distinction between the two concepts is on the effects of posting towards labour contract. In the case of posting governed by the Labour Code, there is a suspension of the labour contract during posting (which implicitly assumes the suspension of payment of wages by employer).
In case of cross-border posting, the labour contract with employer that posts is actively maintained. In this case, the salary will remain in pay at the seconding employer.
The Company has the obligation to ensure the employees’ safety and health („SHW”) relevant instructions in all aspects related to work/ job positions.
The Company has to ensure that each worker receives sufficient and appropriate training in the field of SHW, especially by receiving the pieces of information and work instructions, specific to both the workplace as well as their position:
The workers’ training in the field of safety and health at work includes 3 phases:
Introductory-general training is done when hiring the employee or when posting or delegating them from one company and/or unit to another;
On-the-job training is done after the introductory-general training and aims to present the risks for safety and health at work as well as the measures and actions taken to prevent and protect the employees for each workplace, work station and/or each function exercised.
Periodic training is given to all workers and aims to refresh and update knowledge in the field of safety and health at work.
The employer is responsible with organizing the prevention and protection activities, in the following ways:
a) by the assumption by the employer of the duties for carrying out the measures provided by law, (but only in the case of micro-enterprises and small enterprises, in which activities are carried out without particular risks, with a number of up to a maximum of 49 employees inclusive); or
b) by designating one or more workers to deal with prevention and protection activities; or
c) by establishing one or more internal prevention and protection services; or
d) by calling on external prevention and protection services.
Understanding and applying labour law in Romania is essential to maintaining a compliant and productive workplace. At Accace, we provide expert labour law consultancy and payroll services in Romania to help you manage employment relationships, contracts, internal policies, and day-to-day HR administration. With our support, you can confidently handle your employer obligations while staying aligned with local regulations.
Affecting both domestic and foreign businesses, a number of actions triggers the obligation to register for VAT in Slovakia. To provide a basic overview, our Slovak experts prepared a comprehensive eBook on value-added tax in Slovakia. Find out more about VAT rates, registration of taxable persons, communication with local tax authorities, compliance and VAT return filing, VAT refund to EU member states or third countries and penalties.
The basic VAT rate in Slovakia is 23%. 19% is the first reduced rate that is also applicable. 5% is the second reduced rate applicable for limited goods and services.
Following the consolidation measures of the Slovak government, starting from January 1, 2025, the VAT rates in Slovakia have changed significantly. Aside from the change of the basic VAT rate from 20% to 23%, a new reduced VAT rate of 19% has been introduced, which applies to all food items (except for selected items subject to a 5% VAT rate), restaurant services involving the serving of non-alcoholic beverages and supply of electric energy.
The second reduced rate of 5% is applicable to a longer list of items. In general, it may be applicable to pharmaceuticals, some medical products, books, specific food items, accommodation, entrance fees to sport events and fitness centers, restaurant services involving the serving of food, and the transactions related to state-supported residential rent. In any case, the actual product or service should be reviewed individually.
From January 1, 2025, the reduced VAT rate is no longer applicable on transport of persons by cable cars, ski lifts, access to indoor and outdoor sports facilities (except fitness centers) or admission to artificial swimming pools.
The supply of goods to other EU member states are free from VAT, if delivered to a VAT payer registered in another EU member state and transported to such member state. The export of goods outside of EU is free from VAT but is subject to the confirmation of custom authorities on export from EU.
The taxable amount equals everything that is deemed to be received or shall be received for the delivery of goods or services. In case of the import of goods from third countries, the taxable amount is based on the value of customs.
Voluntary VAT registration in Slovakia is possible, but only for a taxable person, i.e. person (natural or legal person) pursuing economic activity. The turnover threshold for obligatory VAT registration is EUR 50,000 within calendar year. The taxable person becomes VAT payer on January 1 of the next calendar year, or by the reaching the turnover threshold EUR 62,500.
The deadline for filing the obligatory VAT registration falls on the 5th working day after the turnover threshold has been reached. In some special situations there is a shorter period applicable (immediately).
Starting from January 1, 2025, domestic taxable persons who perform exclusively exempted activities such as financial, insurance services, delivery and rental of real estate are also obliged to register for VAT purposes after the turnover threshold has been reached. However, in such cases, the monthly VAT reports shall be submitted only for taxable supplies (not exempted ones).
In Slovakia, group registration for VAT is possible. Several taxable persons who have their seat, place of business or fixed establishment within the territory of the Slovak Republic and are financially, economically and organizationally connected, may participate in VAT group registration and as such be deemed as a single taxable person for VAT purposes.
In Slovakia, a taxable person may become a VAT payer by law without previous registration. It may concern cases of real estate sale, business acquisition or part of a business by purchase or otherwise.
Besides the obligatory registration, Slovak taxable persons must register for the purposes of service delivery to other EU member states, or for the purposes of acquiring goods or services from other EU member states. Registration shall be done in advance.
For those taxable persons that perform e-commerce, it would be worth mentioning that as from July 1, 2021, the rules implementing the Council Directive (EU) 2017/2455 and Council Directive (EU) 2019/1995 entered into force. Further details are available here.
Foreign taxable persons are entities without seat, place of business or fixed establishment located in Slovakia. Otherwise, they are considered as domestic taxable persons, i.e., the same rules are applicable on foreign persons having a fixed establishment in Slovakia as on domestic taxable persons.
Foreign subjects in Slovakia are obliged to register for VAT on the 5th working day after the fulfilment of the legislative conditions.
In the field of e-commerce, as from July 1, 2021, the rules implementing the Council Directive (EU) 2017/2455 and Council Directive (EU) 2019/1995 entered into force.
In Slovakia, local representation by a tax advisor is not obligatory.
Foreign persons may need local representation in specific situations.
Only Slovak language may be used for communication with the tax authorities.
A taxable person can communicate with the tax authorities in electronic format, via the data box of the tax administrator.
A qualified electronic signature is required for the electronic communication.
In Slovakia, the calendar month is considered as a tax period. A later change to calendar quarter is possible, but it is subject to several conditions.
The VAT return shall be filed till the 25th day following the respective tax period.
The EC sales list shall be filed till the 25th day following the respective period, which is in general the calendar month. The EC sales list may be filed for a period of calendar quarter if the value of delivered goods to other EU member states does not exceed the threshold of EUR 50,000 within a calendar quarter nor within the 4 previous calendar quarters.
Besides the VAT return, the control statement listing information from issued and received invoices must be filed as well.
Starting from November 15, 2021, all registered VAT payers are obliged to report to Slovak tax administrator the numbers of all own bank accounts (payment, deposit), which the VAT payer will use for business that is a subject to tax under the Slovak VAT Act. This obligation applies both to bank accounts held with a domestic payment service provider and to accounts held with foreign payment service providers.
Newly registered VAT payers will be required to comply with the reporting obligation immediately from the date on which they become VAT payers with an assigned VAT number, or immediately from the date on which they set up such an account after they have become VAT payers with an assigned VAT number.
VAT payers will be obliged to notify also any subsequent change, addition, or cancellation of notified bank accounts without delay.
The purpose of this measure is to publish, starting from January 1, 2022, the list of VAT payers’ bank accounts on the website of the Financial Directorate on a daily basis. Payment of the supplier’s invoice to a bank account which was not listed at the time of payment may lead to the application of the tax guaranteeing institute. Therefore, customers should pay increased attention to the supplier’s bank accounts, to which they will make the payment of invoices.
It also applies that tax office return the excess deduction only to one of the bank accounts notified to it by the VAT payer as part of the mentioned special notification obligation.
Following the transposition of the Council Directive (EU) 2020/284 into Slovak VAT legislation with effect from January 1, 2024, the payment service providers have new notification duty starting from January 1, 2024.
Domestic payment service providers are required to keep records of payees and cross-border payments in connection with the payment services they provide for each calendar quarter (25 cross-border payments or more to a single recipient), and at the same time to make these records available to the Financial Directorate of the Slovak Republic. Payment service providers shall retain relevant data, submit it to the tax authorities upon crossing the threshold by using a standardized electronic form (uniform across the entire EU) no later than till the end of the month following the relevant calendar quarter to which the information pertains. These records shall be sent by each member state to the Central European Payment System (so-called CESOP), where they are cross-checked and evaluated.
The aim of this is to combat tax avoidance in the field of cross-border e-commerce, as well as to check the correctness of the amount of tax declared.
The value of requested VAT must be at least EUR 50 for the respective calendar year.
The VAT refund may be requested also for shorter periods than a whole calendar year, however such period shall not be shorter than 3 calendar months and the value of VAT must be at least EUR 400.
The deadline for filing a VAT refund request is September 30 of the subsequent calendar year. The request for VAT refund shall be filed at the local tax authority in the other EU member state. The deadline for VAT return is 10 working days after laps of period for delivery of the decision made on the VAT refund, which may be between 4 to 8 months since filing VAT refund request.
Upon the fulfilment of specific conditions. VAT refund for a foreign taxable person is possible.
VAT refund to third countries is possible only upon the fulfilment of specific conditions, including reciprocity.
The value of requested VAT must be at least EUR 50 for the respective calendar year.
The VAT refund may be requested for the whole calendar year or for half calendar year. However, in case of the later, the value of the requested VAT has to exceed EUR 1,000.
The deadline for filing a VAT refund request falls on June 30 of the subsequent calendar year. The request for VAT refund shall be filed at the Tax office in Bratislava, Slovakia. The deadline for VAT return is 6 months after filing the refund request.
Depending on the nature of breach of the law, penalty for non-compliance can be imposed in form of fine, based on situation and severity, up to EUR 32,000, or in the form of interest, up to 3xECB rate or 10 % p.a. Delay interest for late payment is 4xECB rate or 15 % p.a.
Dealing with value-added tax in Slovakia can be complex, especially with frequent legislative updates and detailed reporting obligations. Accace offers comprehensive VAT services in Slovakia to help you manage VAT registrations, filings, audits, and day-to-day compliance with ease. Our local experts ensure your obligations are met accurately and on time, so you can focus on growing your business with confidence.
Affecting both domestic and foreign businesses, a number of actions triggers the obligation to register for Value-added tax in Poland. To provide a basic overview, our Polish experts prepared a comprehensive eBook on value-added tax. Find out more about VAT rates, registration of taxable persons, communication with local tax authorities, compliance and VAT return filing, VAT refund to EU member states or third countries and penalties.
The basic VAT rate in Poland is 23%. Reduced VAT rates of 0%, 5% and 8% apply to a wide range of goods which may change over time (special decree is issued in this respect). In general, lower rates apply to specific hygiene products, books, newspapers and food products. Each product or service should be considered individually.
Intra-community supplies of goods and exports outside the EU are under several conditions subject to exemption with deductibility right (0% tax rate is applied).
The taxable amount is understood as any kind of remuneration received or due in exchange for the supply of goods or provision of service. The tax base also includes other additional payments of similar nature, which have a direct impact on the price of goods or services supplied by the taxpayer.
In Poland, voluntary VAT registration is possible for entrepreneurs whose income in the last tax year did not exceed PLN 200 000. This VAT exemption is related to sales limit with some limitations for specific sectors. The possibility of voluntary registration is also available
in selected cases whereas a VAT exemption rule is applicable.
The threshold for compulsory VAT registration is PLN 200 000 turnover. Entities exceeding this amount are obliged to register. Performing taxable transaction or exceeding the threshold triggers the registration duty which should be performed by filing specific form.
From 1 January 2023, it is possible for related entities to settle VAT jointly through a VAT group.
A VAT Group is a group of financially, economically, and organizationally related entities. In simplified terms, entities belonging to a VAT Group are treated as a single VAT taxpayer.
In Poland there are formal and material conditions stated in the VAT regulation, therefore even entities who do not have the status of VAT taxpayers formally can still be considered as entities performing activities subject to VAT.
If an entity intends to do business with foreign contractors from EU countries, they must register as
a taxpayer of EU VAT. Although they are not obliged to register as an active VAT taxpayer, however, if they make an intra-community acquisition of goods (WNT) and the total value of these transactions exceeds PLN 50 000 during the tax year, they are obliged to account for VAT on these transactions (despite the fact that there is no obligation to settle VAT in respect of other business activities). The obligation to register for EU VAT (irrespective of the VAT exemption) also applies to:
If the entity is exempt from VAT and registers as a taxable person of EU VAT, they do not lose the right to be exempt from VAT.
In Poland, foreign entities are understood as legal persons, organisational entities without legal personality and natural persons with registered office or a fixed place of business outside the territory of Poland, carrying out activities which are subject to Polish VAT regulations.
Foreign entities may benefit from VAT exemption (under the SME procedure) if the following conditions are jointly met:
For distance sellers from the EU, who are selling the goods to customers in Poland, the VAT registration threshold (for Intra-Community Distance Sales of goods) is PLN 42,000.
Representation of the taxable person in front of the Polish tax authority by a tax advisor is not obligatory. The obligation of representation occurs when the taxable person does not have a registered office or a fixed establishment in the territory of an EU Member State.
In communication with the tax authorities, only Polish language may be used.
A taxpayer may communicate with the tax authorities both electronically and by post. However, the VAT returns must be submitted electronically.
Companies in Poland are obliged to submit the JPK_VAT files containing both the VAT returns and the Standard Audit File (SAF), while the VAT records must be kept in an electronic system.
The tax period equals the respective month, or the calendar quarter (only for small taxpayers registered for more than 12 months as active VAT taxpayers, with some exceptions).
In Poland, there is no “traditional” VAT return, but there is a requirement to file a JPK_VAT (SAF-T) covering both the declaration part and the recording part of VAT settlements. The deadline for filing JPK_VAT (SAF-T) is the 25th day after the end of a settlement period. Taxpayers settling VAT quarterly submit monthly (to 25th day after the end of month) the recording part of JPK_VAT (SAF-T) and on
the 25th day of each month following the quarter submit the recording and declarative part of JPK_VAT (SAF-T).
Upon the demand of the authorities, the following electronic documents should be submitted:
EC sales list (or the so-called VAT_UE return) should be submitted electronically by the 25th day of the month for the previous month – the same time as in case of the JPK_VAT (SAF-T).
In order to file for refund, the value of VAT may not be less than the PLN equivalent of the following amounts:
The conversion of the amounts mentioned above expressed in EUR shall be carried out according to the average exchange rate of the euro announced by the National Bank of Poland, in force on the last business day preceding the date of issue of the invoice or customs document.
The amounts used to determine the tax base determined in a foreign currency may be converted by a taxpayer into PLN in accordance with the rules for conversion of income determined in a foreign currency resulting from the income tax regulations applicable to that taxpayer for the purpose of settling a given transaction.
Given entity may apply for a tax refund for a period exceeding 3 months and not longer than 1 tax year, or for a period shorter than the last 3 months of the year. The requested amounts of tax in the given period is established based on the invoices documenting the acquisition of goods and services or based on the customs clearance documents in case of import.
The deadline for filing a VAT refund request falls on September 30th of year following the year covered by the request. It should be submitted in Polish to the tax administration in electronic form.
The deadline for tax refund falls on the 4th month after the request for refund is filed, including all supportive documents. The tax office will refund the indicated amount of tax no later than within 10 working days from the day of taking a decision on the amount to be refunded.
Upon the fulfilment of specific conditions VAT refund for a foreign taxable person is possible.
VAT refund to third countries is possible, upon the fulfilment of specific conditions.
In case of VAT refunds to third countries, the same rules apply as in case of VAT refund to EU member states (see VAT refund to EU member states – Minimum amount and applicable period for more information)..
The deadline for filing a VAT refund request in case of refunds to third countries is the same as in the case of EU member states, i.e., it falls on September 30 of next year and must be submitted electronically in Polish language. The deadline for VAT return also falls on the 4th month after the request for refund is filed, while the tax office conducts the refund also within the 10 working days after taking a decision on the amount to be refunded.
For VAT settlements, the White List is of great importance. It is a generally available register of VAT taxpayers where registration and bank account must be verified before an invoice is settled.
Payment to an account outside the White List in certain cases involves joint and several liability and the exclusion of the expense from the tax-deductible costs for income tax purposes.
Split payment is a payment mechanism under which payment for goods or service is made by the purchaser to the supplier’s bank account and:
In principle, the use of split payments is voluntary and depends on the purchaser’s decision to apply it. However, in the case of making payments for goods or services listed in Appendix 15 to the VAT Act, documented with an invoice in which the total amount due exceeds the amount of PLN 15,000, purchasers are obliged to apply the split payment.
From January 1, 2022, taxpayers can use the National e-Invoices System (KSeF). KSeF is a system that enables the issuing and sharing of structured invoices. The system is currently voluntary. The mandatory National e-Invoice System will come into force on 1 February 2026 for entrepreneurs with sales in excess of PLN 200 million, and from 1 April 2026 for all entrepreneurs.
Taxpayers will not be obliged to issue electronic invoices in KSeF in 2025. KSeF remains a voluntary solution at this point. KSeF will be obligatory for domestic entities and all taxpayers with a registered office or permanent place of business in the country.
Depending on the situation, the VAT sanctions amount to:
This sanction also occurs in the case of non-filing of the tax return and non-payment of the tax liability amount.
Apart from sanctions under the VAT Act, there are also sanctions in the Fiscal Penal Code that should be taken into consideration.
Dealing with value-added tax in Poland can be complex, especially with frequent legislative updates and detailed reporting obligations. Accace offers comprehensive VAT services in Poland to help you manage VAT registrations, filings, audits, and day-to-day compliance with ease. Our local experts ensure your obligations are met accurately and on time, so you can focus on growing your business with confidence.
Employing expatriates in Poland or posting employees abroad brings a new set of obligations to any employer. Our Polish tax and labour law experts gathered all the crucial information related to cross-border employment for fiscal compliance, to provide you with a basic knowledge on the topic. Get an easy overview on expat tax in Poland, such as conditions for tax residency, personal income tax, social security and health insurance contributions or penalties for non-compliance.
Our local tax, payroll and labour law experts are here to help you – as an expat or an employer – to obtain essential expert advice, so that you can effectively address all the matters related to cross-border mobility in Poland and other locations globally.
In Poland, tax residents are natural persons, who:
Have a centre of personal or economic interests (centre of vital interests) on the territory of Poland
They stay on Polish territory for more than 183 days in a tax year
Calendar year
From 2022, it is not possible to deduct health insurance contribution from tax to be pay.
Employee Capital Plan (PPK) is a pension saving system for the employees paying the social security contributions, regardless of the form of employment. This is a universal social program which aim is to increase the financial security of Poles. For the employer, the introduction of this program is mandatory (with exemptions), but the employee’s participation is voluntary. Employees can resign from participation in PPK by signing explicit declaration. If all employees resign and the employer falls within the definition of micro entrepreneur then it is not necessary to introduce PPK.
250 PLN welcome contribution from the state
240 PLN annual contribution from the state
The due date for filing the tax return falls on the end of April, with no possibility to extend the deadline.
Delayed filing of the tax return: from PLN 466.6 up to PLN 93,320 (as of 1 January 2025)
Delayed payment of the due tax: from PLN 466.6 up to PLN 93,320 (as of 1 January 2025)
Delayed or missing registrations at tax authorities: 5 years in prison or a fine up to about PLN 40,000,000, depending on the approach of the court
Delayed or missing report on monthly salary or withholding tax from salary: from PLN 466.6 up to PLN 93,320 (as of 1 January 2025)
Not requesting an A1 form from the respective authorities: the same as the penalty for a delay with social security obligation and payment
Delayed report on social security: up to PLN 5,000
Delayed payment of the social security contributions: penalty interest is applicable
Delayed or missing registrations for the purposes of social security: from PLN 466.6 up to PLN 93,320 (as of 1 January 2025)
Delayed report on health insurance: from 466.6 up to PLN 93,320 (as of 1 January 2025)
Delayed payment of the health insurance contributions: from PLN 466,6 up to PLN 93,320 (as of 1 January 2025)
Delayed or missing registrations for the purposes of health insurance: from PLN 466,6 up to PLN 93,320 (as of 1 January 2025)
Based on the labour law in Poland, there are two popular methods of employment: on employment agreement basis and on civil law agreements basis. The provisions of Polish Labour Code and other acts concerning labour law apply only to persons employed with employment agreements. Persons performing work under civil law agreements are legally not considered employees.
By establishing an employment relationship, an employee undertakes to perform work of a specified type for the benefit of an employer and under his supervision, in a place and at the time specified by the employer. At the same time, the employer undertakes to employ the employee in return for remuneration. It should be emphasized that employment under the aforementioned conditions is considered employment on the basis of an employment relationship, regardless of the name of the contract concluded between the parties. Employment contract cannot be replaced with a civil law contract where the performance of work conditions specified above remain intact.
There are three types of employment agreements in Poland:
Employment agreement for trial period
Employment agreement for definite period
Employment agreement for indefinite period
The agreement for trial period can be concluded for a maximum of 3 months. This type of agreement can precede employment agreement for definite or indefinite period.
The agreement for definite period can be concluded for a maximum of 33 months. Moreover, it is possible to conclude only 3 of such agreements in a row. The agreement which exceeds the total of 33 months or is a 4th agreement in a row will be considered as the agreement concluded for indefinite period.
All foreigners, EU, and non-EU residents can be employed on the basis of the same types of agreements as Polish citizens.
The foreigner has to obtain a work permit and possess legal basis to reside in Poland
in order to perform work in Poland. Such permit is issued on a request of employer by competent local authority (in Polish: wojewoda).
The procedure lasts approximately 2-3 months. Further, the work permit constitutes a basis to obtain working visa in the country of foreigner’s residence, that constitutes the legal basis to reside in Poland.
Citizens of Republic of Armenia, Republic of Belarus, Republic of Georgia, Republic of Moldova and Ukraine can perform work in Poland based on employer’s statement of intention to employ a foreigner.
The following conditions should be met:
The work permit is not required in case of citizens of EU and EEA and Switzerland. Residents of these countries are allowed to perform work under the same conditions as citizens of Poland. However, if the foreigner (EU resident) plans to stay in Poland longer than 3 months, he/she should register his/her stay in provincial office.
An employment agreement should specify the parties of the agreement, registered seat of employer, the type of agreement, the date of its conclusion, as well as the work and remuneration conditions, including in particular:
The type of work
The place where the work is performed
The remuneration corresponding to the type of work, with a specification of the remuneration components
The working time
The starting date of employment
in case of an employment agreement for trial period shorter or equal to 2 months, the duration of the subsequent agreement for definite period intended to be concluded after the current agreement.
Furthermore, the employer must inform the employee in writing, not later than within 7 days from the date of concluding the employment contract, about:
If the employer is not obliged to establish work regulations – they should additionally inform the employee about the night-time hours, the place, date and frequency of remuneration payments, and the adopted procedure of confirming the arrival and presence of employees at work, as well as the procedure of excusing their absence from work.
Additionally, the employer must inform the employee in writing, not later than within 30 days from the date of concluding the employment contract, about:
The remuneration in Poland cannot be lower than minimum wage, which is determined by the Council of Ministers each year. As of the 1st January 2025 the minimum wage amounts to PLN 4.666 gross.
There are 3 methods of terminating employment agreement in Poland:
Termination by mutual consent
Termination with notice
Termination without notice
The employment agreements can be terminated by notice given by each party. The termination notice period depends on the period of employment. Notice periods for definite and indefinite period agreements are the following:
In case of agreement for definite and indefinite period, the employer’s notice of termination should state the reason justifying the termination.
The law in Poland does not provide the list of possible reasons, but according to Polish judicature, the reason should be real, concrete and understandable for employee.
In case of agreements for trial period, the periods of termination notice are the following:
An employer may terminate an employment agreement without notice:
An employee may terminate an employment agreement without notice:
The employer is obliged to pay monthly contributions to social and health insurance and advances on the income tax. The tax advance should be paid until 20th day of the next calendar month. The contribution to social insurance should be paid until 15th day or 20th day of the next calendar month (depending on the legal status of the remitter).
The amounts of personal income tax owed in Poland are presented in the table below.
| Basis for tax calculation | Tax amounts to |
| Up to PLN 120,000.00 | 12% – amount decreasing the tax PLN 3,600 |
| Above PLN 120,000.00 | PLN 10,800.00 + 32% of surplus over PLN 120,000.00 |
The amounts of contributions in Poland are presented in the table below.
| Contribution | Employee | Employer |
| Retirement pension contribution | 9.76 % | 9.76 % |
| Disability pension contribution | 1.5 % | 6.5 % |
| Sickness contribution | 2.45 % | N/A |
| Accident contribution | N/A | from 0.67 % to 3.3 % |
| Health insurance | 9 % | N/A |
| Labour Fund | N/A | 2.45 % |
| Guaranteed Employee Benefits Fund | N/A | 0.1 % |
| TOTAL | 22.71 % | 19.48 % – 22.11 % |
Working time should not exceed 8 hours per day and an average of 40 hours per an average five-day working week. For the work performed in excess of the working-time standards employee is entitled to an allowance. If it’s justified by the type of work or the organization thereof, the employer can introduce the other working-time systems which allow to extend daily amount of working time. Specific requirements related to this matter are indicated in the Polish Labour Code.
An employee is entitled to an annual, paid vacation leave amounting to 20 days – if an employee has been employed for less than 10 years, or to 26 days if an employee has been employed for at least 10 years. In case of an employee who possess intermediate or severe level of disability, such employee is entitled to additional 10 days of annual paid vacation leave.
Periods of previous employment, regardless of intervals in employment and how the employment relationship ended, are counted into the employment period determining the right to leave and the length of leave.
Graduating from the following schools means the following periods are counted into the employment of period on which the length of leave is based:
The periods of education cannot be aggregated.
If an employee attended school while being employed, the employment period determining the length of leave includes either the duration of employment while attending school, or the duration of attending school, whichever is the more favourable to the employee.
In the event of changing the employer during the year, the employee is entitled to paid leave as follows:
An employee who has exceeded the leave he/she is entitled to during employment (with the prior employer), is entitled to leave with the new employer in an appropriately reduced amount. The total length of leave within a calendar year cannot be shorter than the amount resulting from the employment period, as indicated above.
This time off may be granted for 2 days or 16 hours per year, in urgent family matters caused by disease or accident (employee retains 50% of his/her remuneration).
This leave is unpaid and can be granted to employees for 5 days per year. It can be granted to provide care to a family member who requires support for serious medical reasons.
For the period of an employee’s incapacity to work, the employee retains the right to the sickness remuneration. The sickness remuneration is due in amount of 100 % or 80 % of regular remuneration depending on the cause of the incapacity. The employer is obliged to pay the sickness remuneration for the first 33 days of incapacity in any given calendar year. If the incapacity lasts longer the employee is entitled to receive sickness benefit paid by social security institution for a period of up to 182 days, including the previous 33 days of sickness remuneration in this limit of days.
At the written request of an employee, the employer in Poland can grant unpaid leave to the employee. The period of unpaid leave is not counted into the employment period on which the employee’s rights are based.
When granting unpaid leave longer than 3 months, the parties may provide a possibility to recall the employee from leave for important reasons.
An employer can also grant an employee, with the written consent of the employee, unpaid leave to perform work at another employer for a period set out in an agreement concluded on this matter between the employers. The period of such leave is counted into the period of work on which the employee’ rights at the existing employer are based.
According to Polish law, temporary work shall be understood as:
The legal scheme of temporary employment is the following:
a temporary work agency concludes a contract with a user-employer setting forth the rules of leasing of the temporary employee
the temporary work agency employs a temporary employee
the temporary work agency assigns the temporary employee to perform temporary work for the user-employer
It shall be stressed out that the temporary employee remains the employee of the temporary work agency at all times. But it is the user-employer who instructs the temporary employee and subsequently supervises his work.
It shall be noted that unless regulated in Act on Employment of Temporary Workers otherwise, the provisions of the Labour Code and other labour laws concerning the employer and the employee apply accordingly to temporary work agency, temporary employee, and user-employer. The only exception is the regulation related to group redundancies.
The temporary work agency should agree with the user-employer in writing, at least on the following:
The user-employer shall also inform the temporary work agency about the remuneration and its structure (bonuses, fees, additional payments) and also health and safety conditions.
The temporary work agency may not assign the temporary employee with temporary work for a single user-employer for a total period of work exceeding 18 months within a period of 36 successive months. The user-undertaking can use the temporary employee for not more than 18 months within a period of 36 successive months.
There is an exception only in a situation when the temporary employee performs temporary work for the benefit of a given user-employer in a continuous manner, and the work includes performing the tasks of an absent worker of the user-employer. In such a case the temporary work can be performed for maximum of 36 months. The break between the employment for the same user-employer shall last at least 36 months.
The activity of temporary work agency is regulated by Polish state. In order to conduct such activity each entity should register in the National Register of Employment Agencies kept by the marshal of the voivodship. In order to be registered as a temporary work agency the following conditions shall be fulfilled:
The employment agency has an obligation to provide the marshal of the voivodship with a report on the activities of employment agencies – within January 31st of each year for the preceding year – containing in particular the number of persons assigned to perform temporary work.
In the documents, announcements and offers the temporary work agency is obliged to disclose the registration number and label the job adverts for temporary employment as “temporary jobs”.
Employee Capital Plans (PPK) is a voluntary pension saving system for all persons paying the social security contributions, regardless of the form of employment. This is a universal social program which aim is to increase the financial security of Poles.
Regulations concerning PPK are included in the Act on Employee Capital Plans from October 4, 2018. The participation in PPK is voluntary for the employees. They may resign from it based on a written declaration.
On the other hand the employer is obliged to join the PPK in case it employs at least 1 person. There is only one exception for employers being microentrepreneurs, whose all eligible persons resigned from participation in PPK. Such employer is not obliged to join the program. However, such employer shall constantly observe whether it fulfils the requirements of allowed exception. The obligatory basic contribution is financed by both the employee and the employing entity’s funds.
The scheme below depicts the contribution rates:
| Obliged entity | The amount of payment |
| State Welcome Payment | 250 PLN |
| State Annual Payment | 240 PLN |
| Employer | Basic contribution | 1.5% of basis of pension and disability insurance contribution |
| Employer | Additional contribution | 2.5% of basis of pension and disability insurance contribution |
| Employee | Basic contribution | 2% of basis of pension and disability insurance contribution |
| Employee | Additional contribution | 2% of basis of pension and disability insurance contribution |
Funds accumulated in PPK will be paid to the participant after reaching the age of 60 (the legislator introduced the same age for women and men in accordance with the principles of equal treatment in relation to voluntary pension schemes for employee). This payment will be divided into one-off payment (equal to 25% of accumulated capital) and the other parts (equal to 75% of accumulated capital) paid for the period of 10 years and divided in 120 monthly instalments.
Remote work has been implemented to the Labour Code in April 2023. It means the work performance entirely or partially in the place designated by the employee (including under the employee’s address of residence) and each time agreed with employer.
Agreeing on remote work between employee and employer.
Remote work can be agreed:
The fundamental legal basis for remote work.
The law introduced the obligation to specify the rules for remote work in:
Legal basis of remote work in connection with special circumstances.
Employer may instruct (not agree with) an employee to work remotely under special circumstances, i.e., during:
The employer is obliged to:
Occasional remote work may be granted at the employee’s request (non-binding, the employer may refuse to consider it), for up to 24 days in a calendar year, due to its specific nature, some provisions regarding remote work do not apply (e.g., the obligation to provide work materials and tools). Applicability of Occasional Remote Work is based on the provisions of the labour law.
The Act on the Protection of Persons Reporting Violations of Law (Whistleblower Protection Act) came into force on:
The Act implements EU Directive 2019/1937, aiming to protect individuals reporting violations of law and to prevent retaliatory actions against them.
Entities employing at least 50 workers and AML units, regardless of the number of employees, are required to:
Implement internal reporting procedures:
Appoint responsible persons or bodies for handling reports:
Ensure protection against retaliation:
The regulations apply to reporting violations in areas such as:
Additionally, companies may choose to include other violations under their internal rules and policies.
Summary
Financial penalties: Failure to implement reporting procedures or protect whistleblowers may result in fines of up to 50,000 PLN or other administrative sanctions.
Civil liability: Whistleblowers may seek compensation if their rights are violated.
Reputational damage: Non-compliance may negatively affect an organization’s image and its relationships with employees and clients.
The Whistleblower Protection Act is a significant step in fostering transparency and ethical management within organizations. AML units must meet the requirements regardless of their workforce size, emphasizing their key role in combating money laundering. Implementing appropriate procedures ensures legal compliance while enabling organizations to establish additional ethical standards tailored to their internal needs.
Understanding and applying labour law in Poland is essential to maintaining a compliant and productive workplace. At Accace, we provide expert labour law consultancy and payroll services in Poland to help you manage employment relationships, contracts, internal policies, and day-to-day HR administration. With our support, you can confidently handle your employer obligations while staying aligned with local regulations.
Affecting both domestic and foreign businesses, a number of actions triggers the obligation to register for value-added tax in Romania. To provide a basic overview, our Romanian experts prepared a comprehensive eBook on value-added tax. Find out more about VAT rates, registration of taxable persons, communication with local tax authorities, compliance and VAT return filing, VAT refund to EU member states or third countries and penalties.
The basic VAT rate in Romania is 19%, but a reduced rate of 9% applies to the food and beverage industry, save for food / beverages containing a certain degree of sugar and alcoholic beverages, , accommodation, supplies of social housing under certain conditions and admission fees, sport events. An extra-reduced 5% rate applies to schoolbooks, newspapers, magazines and admission fees to castles, museums, zoos, botanical gardens.
The supply of goods to other EU member states are exempt from VAT. In order to apply this exemption, the buyer should be registered for VAT purposes in the other EU member state while the transport of goods to the other EU member state should be justified with a set of required documents.
Starting January 1, 2020, such back-up documentation was aligned at the level of the European Union, therefore such documents required by the tax authorities should be the same in each and every EU Member State.
Deliveries of goods outside the EU are being considered as exports for which the same VAT exemption would apply. In order to apply such exemption, back-up documentation would be required function of the statute of the party involved in the transaction (i.e. supplier or beneficiary).
The taxable amount to which the relevant quota of VAT would apply equals the total consideration obtained or to be obtained for a supply, including any excise duties or other taxes and fees.
In Romania, voluntary registration for VAT is possible and may be performed by any taxable person with the headquarter of the economic activity in Romania and currently conducts or intends to carry out economic activity falling within the scope of VAT.
Regarding the mandatory VAT registration, a threshold of EUR 88,500 annual turnover is provided.
The application for VAT registration is made within 10 days from the end of the month in which this threshold is reached or exceeded.
Group registration for VAT is available for entities in Romania under certain conditions.
According to the legislation in force, Romanian tax authorities have the right to register ex officio for VAT purposes those taxable persons that register an annual turnover of at least 300.000 RON and have not requested the registration as per the law.
Besides the mandatory registration, Romanian taxable persons would have to register for VAT purposes before performing intra-Community transactions, under certain conditions, for the purposes of service delivery to other EU member states, or for the purposes of acquiring goods or services from other EU member states. The registration must be done in advance.
Foreign persons are taxable person whose seat, place of business or fixed establishment is located outside Romania.
Before starting an activity in Romania that is subject to VAT, any foreign taxable person should register for VAT purposes in Romania.
In case of distance sales activity, the threshold for VAT registration is of EUR 10,000 as per the new One Stop Shop system. However, the threshold takes into consideration also other transactions, therefore an analysis is required.
In Romania, local representation by a tax advisor is not mandatory.
Only Romanian language may be used for communication with the tax authorities.
A taxable person may communicate with the tax authorities in electronic format, through the virtual space of the taxpayer, or on the online platform of the tax authority.
However, the electronic communication requires a certified electronic signature.
In Romania, the standard fiscal period is the calendar month.
For taxable persons whose previous year-end turnover is lower than EUR 100,000 and did not perform intra-community transactions, the fiscal period is the calendar quarter.
The VAT return should be filed no later than 25th day following the respective tax period.
The EC list shall be filed until the 25th day following the respective tax period. In addition, the informative return for domestic transactions should be provided as well.
If the VAT refund request concerns a period of less than one calendar year, but greater than 3 months, the amount of VAT for which the refund is requested may not be less than the RON equivalent of EUR 400.
However, if the request refers to a period of one calendar year or the remaining period of the calendar year, the amount of VAT may not be less than the RON equivalent of EUR 50.
The period for which the VAT is refunded may be maximum one calendar year and minimum 3 calendar months. Refund requests may, however, concern a period of less than 3 months if this is the period remaining until the end of the calendar year.
The request for refund should be transmitted electronically at the latest by September 30 of the calendar year following the refund period. The request should be filed at the local tax authority of the foreign taxable person.
The VAT refund is possible for foreign taxable person if certain conditions are met.
The VAT refund is possible concerning third countries if certain conditions are met.
VAT refunds to third countries are subject to the same rules as refunds to EU member states.
Nevertheless, another mandatory condition is that between Romania and that third party to be concluded a specific mutual agreement.
The request for VAT refund should be submitted by September 30 of the subsequent calendar year following the refund period. The request should be submitted to the registry office of the tax authorities or by post. The deadline for issuing the decision is 6 months starting from the date the tax authority has received the entire documentation.
The penalties for non-compliance may be the following:
Dealing with value-added tax in Romania can be complex, especially with frequent legislative updates and detailed reporting obligations. Accace offers comprehensive VAT services in Romania to help you manage VAT registrations, filings, audits, and day-to-day compliance with ease. Our local experts ensure your obligations are met accurately and on time, so you can focus on growing your business with confidence.
About Accace
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About Accace Circle
Accace operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience and erase the borders of service delivery. Covering over 60 jurisdictions with more than 7,000 professionals, we support over 80,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and process at least 800,000 pay slips globally.
